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A crucial challenge for economists is figuring out how people interpret the world and form expectations that will likely influence their economic activity. Inflation, asset prices, exchange rates, investment, and consumption are just some of the economic variables that are largely explained by expectations. Here George Evans and Seppo Honkapohja bring new explanatory power to a variety of expectation formation models by focusing on the learning factor. Whereas the rational expectations paradigm offers the prevailing method to determining expectations, it assumes very theoretical knowledge on the part of economic actors. Evans and Honkapohja contribute to a growing body of research positing that households and firms learn by making forecasts using observed data, updating their forecast rules over time in response to errors. This book is the first systematic development of the new statistical learning approach. Depending on the particular economic structure, the economy may converge to a standard rational-expectations or a \"rational bubble\" solution, or exhibit persistent learning dynamics. The learning approach also provides tools to assess the importance of new models with expectational indeterminacy, in which expectations are an independent cause of macroeconomic fluctuations. Moreover, learning dynamics provide a theory for the evolution of expectations and selection between alternative equilibria, with implications for business cycles, asset price volatility, and policy. This book provides an authoritative treatment of this emerging field, developing the analytical techniques in detail and using them to synthesize and extend existing research.

In Time, Capitalism and Alienation, Jonathan Martineau provides a socio-historical analysis of the modern temporal regime and its relationship to capitalist development, from the innovation of the clock until the advent of World Standard Time.

In his brilliant interdisciplinary analysis of the global financial crisis, Joseph Vogl aims to demystify finance capitalism—with its bewildering array of new instruments—by tracing the historical stages through which the financial market achieved its current autonomy. Classical and neoclassical economic theorists have played a decisive role here. Ignoring early warnings about the instability of speculative finance markets, they have persisted in their belief in the inherent equilibrium of the market, describing even major crises as mere aberrations or adjustments and rationalizing dubious financial practices that escalate risk while seeking to manage it. \"The market knows best\": this is a secular version of Adam Smith's faith in the market's \"invisible hand,\" his economic interpretation of eighteenth-century providentialist theodicy, which subsequently hardened into an \"oikodicy,\" an unquestioning belief in the self-regulating beneficence of market forces. Vogl shows that financial theory, assisted by mathematical modeling and digital technology, itself operates as a \"hidden hand,\" pushing economic reality into unknown territory. He challenges economic theorists to move beyond the neoclassical paradigm to discern the true contours of the current epoch of financial convulsions.

An innovative new anthology exploring how science fiction can motivate new approaches to economics

Originally published in 1982. This book deals with exchange-rate determination and the implications of floating rate regimes for the time paths of prices and quantities. It develops a class of stochastic equilibrium models of the open economy operating under flexible exchange rates, assuming that agents are endowed with rational expectations but do not possess full current information as to the state of the world. Chapters look at a model’s response to economic disturbances, the effect on non-traded goods, and cyclical variations of the terms of trade. The final chapter considers a model to investigate purchasing parity issues. 1. Introduction and Overview 2. Fluctuating Exchange Rates and the International Transmission of Economic Disturbances 3. \"Real\" and Nominal Exchange Rates in an Uncertain World: The Traded Non-Traded Goods Nexus 4. Cyclical Variations of the Exchange Rate and the Terms of Trade 5. Rational Expectations, Purchasing Power Parity and the Business Cycle

Recognising that the economy is a complex system with boundedly rational interacting agents, the book presents a theory of behavioral rationality and heterogeneous expectations in complex economic systems and confronts the nonlinear dynamic models with empirical stylized facts and laboratory experiments. The complexity modeling paradigm has been strongly advocated since the late 1980s by some economists and by multidisciplinary scientists from various fields, such as physics, computer science and biology. More recently the complexity view has also drawn the attention of policy makers, who are faced with complex phenomena, irregular fluctuations and sudden, unpredictable market transitions. The complexity tools - bifurcations, chaos, multiple equilibria - discussed in this book will help students, researchers and policy makers to build more realistic behavioral models with heterogeneous expectations to describe financial market movements and macro-economic fluctuations, in order to better manage crises in a complex global economy.

Cover -- Contents -- Acknowledgements -- Foreword -- Introduction -- Part I: A New Approach to Monetary Analysis -- 1 The origins of an alternative definition of money -- 1. The exclusion of money from the commodity set -- 2. Smith's great wheel of circulation -- 3. Money as the form of value -- 4. Walras' concept of numeraire -- 2 Nominal money and real money -- 1. The classical distinction of Adam Smith and David Ricardo -- 2. Marx's contribution to the classical distinction between nominal money and real money -- 3. Summing up -- 3 The Banking School and the Currency School -- 1. The Currency Principle -- 2. The Banking Principle -- 4 Keynes's analysis of money -- 1. From commodity-money to bank money -- 2. The creation of money -- 3. The distinction between money and purchasing power -- 4. Money's value and production costs -- 5 Money and time -- 1. The emission of money and the distinction between bank money and state money -- 2. The emission of money and time -- 6 Income and time -- 1. The distinction between money as a means of payment and money as a medium of exchange -- 2. TTbe creation of income -- 3. The destruction of income -- Part II: A Critical Appraisal of Traditional Monetary Analysis -- 7 The concept of commodity-money -- 1. The concept of commodity-money within the classical theory of value -- 2. The concept of commodity-money within the neoclassical theory of relative prices -- 8 Two faulty concepts: money as a net asset and money as a veil -- 1. Money as a net asset -- 2. Money as a veil -- 9 The neoclassical dichotomy -- 1. 'Legitimate' versus 'traditional' dichotomy -- 2. The triumph of Walras' law -- 10 The quantity theory of money -- 1. From Adam Smith to Irving Fisher -- 2. The monetarist restatement -- 11 The monetarists' attempt at generalization -- 1. The attempt to integrate Keynes's analysis.

Cover -- Contents -- Foreword -- Acknowledgements -- Introduction -- 1 The Definition of National Income -- Part I: Income as a flow of expenditures -- 1. Stocks and flows -- 2. Keynes's revolution announced -- 3. The controversy on saving and investment -- 4. I = S: a tautology? -- 5. The 'vicious' circle -- 6. Identity I (omitted) S and the rejection of the 'vicious' circle -- Part II: The Keynesian definition of national income -- 1. The Treatise on Money -- 2. From The General Theory to the Treatise -- 3. The General Theory -- 4. Keynes and 'the flow of income' -- 5. Identities versus conditions of equilibrium -- 6. Autonomous expenditures -- 2 The Multiplier Analysis -- Part I: The dynamic multiplier -- 1. The traditional theory -- 2. The multiplier and the identity of S and I -- 3. The multiplier and the identity of Y and C + I -- 4. The multiplier is always and necessarily equal to 1 -- Part II: The instantaneous multiplier -- 1. The multiplier and the multiplicand -- 2. The autonomous expenditures -- 3. Static, dynamic and k (omitted) 1 -- 4. The integration of money: a short appraisal -- 3 The Theory of Emissions -- Part I: The traditional analysis of time -- 1. Continuous versus period analysis -- 2. The determination of national income in continuous and period analysis -- 3. The analogy between economics and classical mechanics -- 4. Expenditures are instantaneous events related to a finite period of time -- 5. A recent dispute on time analysis -- 6. Quantum time and the traditional theory -- Part II: Time as quantum -- 1. The link between expenditures and production -- 2. Creation versus transformation -- 3. The theory of 'integrated' money: a short account -- 4. Emissions -- 5. A short note on profits -- 6. The factors of production -- 4 Ex-Ante and Ex-Post in Chronological and Quantum Time.

Time and the Macroeconomic Analysis of Income will undoubtedly puzzle, stimulate, infuriate, or annoy many readers. Alvaro Cencini challenges so many of the commonly held notions which are perpetuated in elementary textbooks and taken for granted in learned journals that a first reaction is bound to be that the author must be naive or ignorant this is far from the case; the questions that Cencini raises are original and searching. His answers are even more intriguing for economists and interested readers.